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Tuesday, Feb 07th
Mumbai, Nov. 14: India is witness to an increasing differential between an ordinary worker's wages and a chief executive. The differential has moved dramatically to touch 1:400 as against 1:20 two decades ago, a study conducted by the Centre for Corporate Governance indicated. According to the survey there is an urgent need to rein in excessive compensation.
Addressing a seminar on the "Challenges of Corporate Governance in turbulent times," Mr M. Damodaran, chairman of the Unit Trust of India and IDBI, and also chairman for Western Chapter of Centre of Corporate governance said, "Corporate Governance should not only be on paper, but should also be put into practice." "One of the ultimate negative points of corporate governance is the chief executive, often the promoter, of a company also heading the board of directors. A structural change should be there in the composition of the board of directors so that better corporate governance can be practised," Mr Damodaran said.
The regulators should not be too obsessed with quarterly results of corporates. It requires lengthy reviews and huge efforts, especially if the company is large and diversified, to put together a quarterly review of performances. Such mandatory requirements put enormous pressure on companies and could force people to put out information that may not be entirely accurate, Mr Damodaran added.
Dr Madhav Mehra, president, World Council for Corporate Governance also expressed his views in saying that CEOs have not been focusing on creating wealth but manipulating figures to justify large bonuses to enhance their pay packages and pointed out that the other reason for corporate collapse is the "mortal fear in which today's CEO lives off the stock market, which forces him to inflate quarterly earnings. We have to educate investors to ignore quarterly reports and take a long view of the company's performance."
Reliance, NTPC, HPCL and Thomas Cook were the recipients of this year's Golden Peacock Awards. Reliance was awarded for excellence in social responsibility in the private sector.
Thomas Cook and HPCL received awards for excellence in corporate governance in private and public sector respectively.
Author : Dr Madhav MehraDr Madhav Mehra is the President of World Council for Corporate Governance
"Dr Madhav Mehra is a phenomenon, nothing describes him better."
Ola Ullsten, Former Prime Minister of Sweden at the 8th World Congress on Environment Management, Palampur, 2006"
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Dr Mehra, I just read your commentary on Satyam....You made one of the wisest observations on board failures I've ever read - "It is difficult to understand something when your salary depends on not understanding it".Brilliant!
Ralph Ward, Boardroom Insider
"Dr Madhav Mehra, has played a significant role to bring about a change in the mindset of the corporate world. India will remember him as a great pioneer who foresaw such a need and strove for inculcating a culture of quality in all spheres of activity."
S S H Rehman Executive Director, ITC Group of Hotels
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"I have known Dr Mehra for the last 8 years in my capacity as the Chairman of the Centre for Social Responsibility,..... Chairman of the S.M. Charitable Trust . I am amazed by the energy, enthusiasm and dedication that he brings to every idea he promotes."
P.N. Bhagwati, Former Chief Justice of India
"Rarely does one come across a legend like Madhav Mehra. I have witnessed his dedication everywhere: building community centres for gaddies of Dhauladhar, hospital and school for slum dwellers in Delhi and addressing corporates on the social role of their business."
Dr Sahib Singh, Ex-Chief Minister, speaking at SM Medical Centre, 13.04.04"
"Had Dr Madhav Mehra just been the founder of the IOD, that in itself would have been a piece of work tat the present and future generations would cherish. But by establising so many other organisations, he has really ensured that we respect him as a pioneering figure of all te good that Indian business is striving for."
Javed Husain, Professor and former Dean of Engineering
"Address of Dr Mehra was a unique experience. I aspire to listen to him again and wish Dr Mehra can find time to address youth in the colleges."
MK Yadav, Hindustan Zinc LTD
"Dr Mehra has given a unique dimension to CSR. His interpretation is particularly relevant to us and we must invite him once again to address our top executives"
Hon'ble Carlton Davis, head of Jamaica's Civil Service"
"Dr Mehra's passion comes alive from his speeches"
Uma Arora, Chairman Idam Learning
"Dr Madhav Mehra's keynote address was the most thought provoking"
N A Patil & R B Rajpune
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